In the fall of 2018, management consulting firm McKinsey & Company’s State of Fashion projected that 2019 would be a year of awakening for the industry. “The old rules simply don’t work,” they said. To thrive in the new paradigm, they advised, companies need to shift to digital-first thinking, speed their time to market and respond to the increasing consumer demands for sustainability and social responsibility.
The key to making the changes we need to thrive is technology. And while making big expenditures for software and the like may seem like a gamble in an industry where over half of clothing lines fold within their first four years in business (according to the Statistic Brain Research Institute), the reality is that choosing not to follow the path of digital transformation is the much bigger business risk.
The good news is that innovation in the fashion industry is flourishing. If 2019 was the year of awakening, 2020 should be the year of action, and every fashion business, from a small, independent designer to the world’s biggest conglomerates, should make this priority No. 1 in this new year.
Think Digital First
In 2017, a Danish TV station revealed that the fast-fashion retailer H&M had burned 60 tons of new and unsold clothes since 2013. There was an instant backlash, and the retailer immediately rolled out plans to be a better global citizen. A similar public relations nightmare struck Burberry, and while both companies recovered after making clear plans of action to change their ways, it’s almost certain there are still companies that simply haven’t been caught executing incredibly wasteful practices. For them, two years later, the public might not be so forgiving.
Why did H&M and Burberry have so much excess in the first place? Because we make too much stuff. In fact, According to the Australasian Circular Textile Association, about 30% of garments that are produced are never sold.
Fast fashion harkened in an era in which quantity was king. Manufacturers would just keep producing new things, and those things would end up in stores where people might buy them. Since a crop of new merchandise was always on the way, the items that didn’t sell were drastically marked down. And if they still didn’t sell, they were disposed of, whether in a landfill or, a la H&M, in a fire.
Now we’ve been awakened, and in 2020, the action we need to take is stepping away from the materially and economically wasteful path of “produce first, cross your fingers and hope that it sells.” And we do that by thinking digitally first.
In apparel production, digital thinking can take a few different forms. One is to harness the insights that are locked in the data you’re likely already collecting to better align production and sales. With artificial intelligence-based systems for predictive analytics becoming more accessible and affordable, companies of all sizes can gauge demand for a certain item, size, color, etc. and manufacture accordingly. In addition, tech giants like Amazon and IBM are helping brands leverage insights to ensure more of the items produced are sold, and fewer items are destroyed.
Another digital-first initiative that has had positive repercussions for marketing and social responsibility is incorporating the new generation of apparel software into the pre-production workflow. Last fall, PVH-owned Tommy Hilfiger made industry headlines with the declaration that, by 2021, the company’s apparel collection — 60,000 items per year — would be done entirely in 3D. This move drastically reduces resource usage, from decreasing the time it takes to create different iterations and visualize colorways to eliminating the need for physical samples altogether. Going one step further, the simulations that come from the 3D software on the market today are so true to life that it’s possible to merchandise a collection completely digitally, and then only produce what’s been ordered.
Speed Time to Market
The second necessity for survival in today’s challenging fashion industry is getting products to market faster. This is another area where advancements in technology play a key role. McKinsey’s 2018 report, “Measuring the Fashion World,” estimates the average time to market for mid-range companies is 32 weeks, while value and discount companies are a bit faster at 27 weeks (which is still over six months). The design process alone can take 10 weeks; that’s nearly three months, or an entire season. With digital workflows like the ones being implemented at PVH, months can be shaved off the cycle.
With the emergence of smart factories, the entire process from concept to commerce can be brought down to weeks. Deloitte describes a smart factory as, “A leap forward from more traditional automation to a fully connected and flexible system — one that can use a constant stream of data from connected operations and production systems to learn and adapt to new demands.”
In a smart manufacturing scenario, the instructions for a garment’s production are transferred digitally to the factory in a way that is understood by the machines. With ever-more-capable robotics, things like cutting and sewing can be conducted with little human intervention. Because fabric has very different physical qualities than things like auto parts, a fully automated production process is still aspirational. Still, innovations in areas like artificial intelligence and sensors are making apparel industry 4.0 more of a reality every day.
Responsibility & Sustainability
The last of the actions most imperative to fashion businesses in 2020 is addressing — and mitigating — the industry’s history of irresponsible and unsustainable practices. Moving to data-driven production and adjusting supply to meet demand is an obvious positive step in this direction. So is smart manufacturing. Not only can automated processes reduce waste by being more precise than humans can ever be, they require fewer people, thus lowering manufacturing costs. With lower manufacturing costs, companies can adjust where they are making goods to shorten their supply chain. It’s good for the bottom line as well as for Mother Earth.
Perhaps less visible to the end consumer but no less important is minimizing the negative impact caused by the materials with which we make our garments.
“While cotton, especially organic cotton, might seem like a smart choice, it can still take more than 5,000 gallons of water to manufacture just a T-shirt and a pair of jeans,” EcoWatch reported. “Synthetic, man-made fibers, while not as water-intensive, often have issues with manufacturing pollution and sustainability. And across all textiles, the manufacturing and dyeing of fabrics is chemically intensive.”
While a designer can’t change how many gallons of water it takes on average to process cotton, he or she can take environmental impact into consideration when selecting which fabrics to use or from whom to purchase them.
For example, the processes involved in denim production are notoriously water intensive, using anywhere from 500 to 1,800 gallons to grow, dye and process the cotton, according to treehugger.com. But there are innovators who are pioneering solutions that use less. One is the Spanish company Jeanologia. Not only has it created new ways to finish denim and other materials in environmentally sustainable ways, but it’s trying to help other companies to reduce the impact of their own garment finishing processes. By 2025, the company strives to eliminate water waste in the textile processing. It’s also helping other companies to understand and reduce the negative impact of its own processes by making their Environmental Impact Measuring software available to the entire industry.
The status quo under which fashion has operated since the dawn of prêt-à-porter has been wasteful and inefficient. Many in the industry have been reluctant to step away from the old ways, but as McKinsey noted, the old ways no longer work.
In 2019, the problems in our industry became so apparent that we had no choice but to have an awakening. Now it’s 2020. Change isn’t a choice; it’s an imperative. It’s also a good thing that will enable us to be a more sustainable industry, both environmentally and economically.